The coming year will almost certainly be a challenging
one for America, with a war against Iraq looming on the horizon, a long
overdue economic recovery still not quite underway and governments at
every level running massive deficits. In our opinion, 2003 won't be the
year that all hell breaks loose, but as with 2002, it will build upon
the themes and trends that have emerged since September 11, 2001. But
2003 will not be a mere placeholder -- this is the year where politicians
start beating the drum for the elections in 2004.

Here's a look at what we think might happen over the
next 12 months.

IRAQ

The war in Iraq lasts six months, much longer than people
anticipated, because the military doesn't fold like a tent and Hussein
is more elusive than thought. The major sticking point will be Bagdad,
where American generals will have to weigh the possibility of massive
civilian causalities against the thousands of soldiers that would be killed
in an urban assault.

By the end of summer, it's all wrapped up and Hussein
is safely tucked away in the Libyan compound he's been building for the
past few months. Iraq is handed over to the U.N. and the country is thrown
into complete chaos for months as America attempts to regain control over
the world's second largest supply of oil reserves.

MIDDLE EAST

Palestine ceases to exist in its current form as Arafat's
power base erodes and is replaced by pan-Arab terrorists. The fighting
continues and Israel gets hit by a major attack during the American offensive
against Iraq, but after Hussein is toppled, a new Palestinian leadership
emerges that could become a valid peace partner in 2004. As much as the
world prays for something different, peace in the Middle East doesn't
occur in 2003. Expect at least one major missile attack on a major Israeli
city that is launched from Lebanon, the new home of Hizbollah.

The two-faced Saudi regime is destabilized by the end
of the year, overrun by Islamic militants who are sick of the way royals
pander to American interests. Along these lines, Americans become sick
of the way royals pander to Islamic interests. Pleasing no one, Saudi
control over Mecca is challenged by a new, more radicalized political
movement.

NORTH KOREA

North Korea becomes the problem that won't go away,
embroiling China, Russia, U.S. and the U.N. in rounds of talks to figure
out what to do about the country. North Korea continually blames the U.S.
and makes threatening statements, but eventually, economic sanctions are
imposed a/la Iraq. It contains the problem in the short run, but South
Korea complains that the sanctions hurt its economy too.

AFGHANISTAN

Afghanistan drops off the media radar as a story, but
the country makes slow, remarkable strides towards peaceful coexistence.
By the end of 2003, Afghanis will have known two years of relative peace,
which has given them the courage to finally raise an army that can police
the nation.

AMERICA'S ECONOMY

After three years of falling, the U.S. stock market
posts moderate gains, thanks to the successful conclusion of the war against
Iraq and the eventual passage of Bush's $670 billion economic stimulus.
That said, economic growth remains slight and average Americans really
start to feel the pain as employers refuse to raise wages and pass along
more medical insurance costs to employees.

The amount of debt each American has continues to soar,
but this time, there's nothing left to borrow as banks finally tighten
their lending standards after three years of 0% financing and record low
mortgage rates. Because people bought so many goods on the notion that
they wouldn't have to make any payments until 2004, as 2004 approaches,
the wallets snap shut. As with this Christmas season, there is little
to boast about in 2003.

Unemployment falls to about 6.5% by the end of the year.
The travel industry, which accounts for a sizeable chunk of the economy,
undergoes a depression unlike anything anyone has ever seen. Airline employees
wonder if they should panic as United Airlines is forced to liquidate
by summer, putting 83,000 people out of work.

Also, government spending in areas outside of
defense, especially at the state level, will drop off a cliff, costing
more people their jobs as deficits ripple through the economy.

THE PRESIDENTIAL ELECTION

The Republican party continues to roll along, aided
by the successful war. Americans don't blame Bush for the economic weakness,
because the Republicans passed a version of his stimulus package. Bush
enters 2004 with a huge lead in the polls. The Democratic party's leadership
changes and John Kerry emerges as the leading candidate for '04 after
elbowing aside Hilary Clinton, who makes yet another gaffe trying to stop
Bush's economic package.

MEDIA

Cable TV becomes the huge story in '03 as ratings begin
to regularly trounce broadcast, sending the big three networks into a
tailspin. The addition of movies on demand and other services prove incredibly
popular as well, giving rise to the birth of modern TV. By next Christmas,
plasma sets will be 50% cheaper.